VA’s IG settling in, cracking down on fraud and mismanagement

When he took office two years ago as inspector general at Veterans Affairs (VA) Michael Missal told reporters he hoped to quickly repair the office’s image. After years of criticism for cursory investigations and lack of leadership, Missal appears to be turning things around.

From multi-billion dollar financial statements to whether someone falsified data at a regional office, Missal’s office monitors an agency that serves more than nine million veterans at 170 medical centers and more than 1000 outpatient sites.

Most recently, Missal’s office presented its final FY2017 audit for an agency that had a budget of more than $180 billion. The report found six material weaknesses at VA. Bringing attention to those issues is part of the job he was hired to do.

First and foremost was the startling figure of $2.8 trillion. That’s what VA reported as its liability for compensation and burial benefits.

“These are obviously huge numbers and the VA does not have a qualified and permanent chief actuary on site who would take responsibility for these estimates. So that was a material weakness not to have an actuary hired,” Missal told Federal Drive with Tom Temin.

Another was VA’s community care obligations, those programs where VA gets healthcare outside the VA system with providers. They spent about $10 billion on the program last year.

“There again we found problems from transaction obligations, liquidation of unfulfilled authorizations, and reconciliation. Financial reporting was another weakness,” he said.

Missal said VA has a financial reporting system implemented in 1992 that continues to require extensive manipulations, journal entries and manual processes. It’s something he calls “terribly out of date.”

A fourth issue revealed by the audit was the guarantee VA has to commercial lenders against losses from veterans mortgages that default, where Missal said the audit found that the liability estimation model had significant differences between the forecast and actual program results.

There were also issues found with the organization’s CFO structure.

“VA does have a CFO. However each of the components of VA — the Veterans Health Administration Veterans Benefits Administration and the National Cemetery Administration — has their own CFOs who do not report to the V.A. CFO. Rather they report into their component head,” Missal said.

Again, that’s a material weakness.

Missal said he believes VA management understands the significance of these deficiencies.

“What they say is this is the way it’s been historically for the past number of years. We’ve identified this as a material weakness saying that you need to have better coordination consolidation within your CFO structure which includes reporting up to the CFO so that guidance and other directives can be implemented effectively. And to date they just haven’t accepted this recommendation,” Missal said.

Finally, the audit revealed many of VA’s legacy IT security controls were obsolete. While he said there have been improvements from the 2016 audit, Missal acknowledges “VA still has a lot of work to do.”

As VA tries to move toward managing care in a more contemporary way, one goal is improve the balance between the quality of access and the quality of service. To do this, VA assigns a group of veterans to each primary care provider. In FY2018, approximately 5,500 full time primary care providers serve about 5.3 million veterans.

To manage that caseload, the VA IG office looks to see if those services are managed in a timely manner. In many cases, they are not.

An example Missal gave is how VA figures wait times for enrollment. Although VA claimed only 8 percent of newly enrolled veterans in the first seven months of fiscal year 2015 waited more than 30 days, the number was not accurate.

“What they did is they took that number from once the veteran was enrolled to when they had the appointment. We thought that was not appropriate because if it’s newly enrolled, the time really should start from when a veteran tries to get in the system,” Missal said.

“We determined it was actually 53 percent of newly enrolled veterans waited more than 30 days. It’s a huge difference and it really is related to when you start the clock and we thought it was appropriate if it’s a newly enrolled veteran, the clock should start when the veteran tries to get in the system.”

Missal explained that following the release of the audit every year, the VA IG office receives calls from VA employees reporting similar issues we’ve reported at their own facility.

“This report shows that the whistleblower activity at VA seems to be alive and healthy. Yes, we get we got 40,000 contacts to our hotline a year. A number of them are whistleblowers and we greatly appreciate the assistance and information that they provide to us. It’s extraordinarily helpful,” he said.